Orange County FHA, VA & First Time Buyer Loan Information

My goal is to provide valuable information for home buyers, both First Time Buyers and Move Up Buyers. This information will be about loan programs such as FHA ,VA, Conventional Fannie Mae and Freddie Mac, Reverse Mortgages, and even Portfolio Jumbo programs. I will also touch on tax advantages of homeownership, Rent vs. Own analysis, and any other aspect of loans and home ownership that will be of interest to Orange County home buyers and homeowners.

The VA loan program is a great program for those that are eligible. Fannie Mae/Freddie Mac require a minimum of 10% down payment for a home in Orange County. Even FHA, which is a great program, requires a 3.5% down payment. To make the comparison even better, while FHA has Monthly Mortgage Insurance equal to .55% (essentially adding .55% to the interest rate) VA has no monthly mortgage insurance. This can save thousands of dollars a year for VA eligible home buyers.

To obtain VA home loan veteran benefits you must have served on active duty in the Air Force, Army, Coast Guard Navy or Marine Corps and have been honorably discharged. You may still be entitled to benefits if you were discharged under other than honorable circumstances. This requires further research by the VA. In the end the VA makes the final determination.

The first thing you need to obtain in order to use your VA Entitlement is a VA Certificate of Eligibility. If you do not have one already we would be happy to assist you in getting one. The process is quick and easy. Just call our office and we will be glad to send out to you a VA Form 26-1880 or request for COE. Simply fill it out and return it to the VA and you should have your COE within a couple of weeks. If you are in a hurry, you may visit your local VA Office and have your COE in as little as one day.

If you are looking to purchase a condo, you must first check to make sure the condo project is on the VA Approved Condo List.

VA loans, like FHA and Conventional Fannie Mae and Freddie Mac loans, require full income documentation to qualify. Really, all mortgage loans are full doc these days. This means that to qualify for a VA loan, besides having the property, VA Entitlements, and supplying a DD214 and then Certificate of Eligibility, the Veteran will need to provide the following items:

Paystubs for the most recent 30 days. These need to show a consistent income, whether it be an hourly wage or salary. Overtime will be averaged out over the past 2 years, as long as it is continuing at present. The lender will be looking at the Gross income, before taxes and other deductions.

Tax Returns and W2's for 2007 and 2008, or the most recent 2 years. Again, the lender is looking for some consistency. There are situations where the lender can look at other factors if consistency is not apparent. Compensating factors are important in any loan file. A compensating factor can be any of the following: time on the job, good cash reserves, high FICO scores (over 740), low debt to income ratio's.

2 months most recent bank statements. Although VA does not require cash reserves, it can help the loan file if other areas are weak. Also, a VA underwriter will look for NSF's on the bank statements, which would require a letter of explanation.

One of the best things about a VA loan for Orange County home buyers is the VA Streamline Refinance program, or IRRRL, which allows VA borrowers to quickly and easily take advantage of low rates with having to appraise the property or even provide all the income documentation that is needed during the initial purchase.

You just need to find an Orange County VA Lender. A Direct VA Lender will process, underwrite, and fund your VA loan, rather than just originate and then "broker" to another lender. You will also want to find a loan officer who has experience with VA loans and can provide you with a loan scenario showing a complete break down of the purchase price, loan amount, payment, and closing costs involved with a VA loan. It is important to get as educated as you can on all that goes into getting a VA loan before you actually begin making offers on homes.